Trump adviser resigns over tariff plans

Donald Trump's chief economic adviser Gary Cohn is leaving the White House over its trade policy.
Donald Trump's chief economic adviser Gary Cohn is leaving the White House over its trade policy.

Gary Cohn, the top economic adviser to US President Donald Trump, has resigned, a move that came after he lost a fight over Trump's plans for hefty steel and aluminium import tariffs.

The departure of Cohn, the National Economic Council director, expected to be finalised in a few weeks, will blow a hole in Trump's advisory team at a time when the economy is growing but stock markets are experiencing surges of volatility.

Trump said in a tweet on Tuesday night he "will be making a decision soon" on replacing Cohn. Administration officials said Peter Navarro, who is director of the White House National Trade Council, and conservative commentator Larry Kudlow were the "top two candidates" for the job.

White House officials said the tariffs dispute contributed to Cohn's decision to leave but was not the sole reason. One official cited several issues and noted: "His biggest mission was on the tax cut bill, which he got passed."

Following the news, the US dollar weakened, while an exchange-traded fund tracking the broad market S&P 500 dipped 1 per cent.

"One of the adults in the room has left. The markets will worry that this is a signal that we will definitely go ahead with these tariffs," said Paul Mortimer-Lee, chief market economist at BNP Paribas corporate and investment banking.

Without Cohn in the picture, Navarro, an economist, will likely have a clearer field to pursue a protectionist agenda, which squares with Trump's long-held concerns about trade.

Trump said last week he would impose import tariffs of 25 per cent on steel and 10 per cent on aluminium, a move criticised by a number of prominent Republican lawmakers.

Cohn's departure indicated Trump would proceed with the tariffs, said Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, a think tank.

"The chances of us having a trade war have now increased dramatically. ... The economic nationalists now certainly have the upper hand," she said.

Cohn, 57, is the former president and chief operating officer of investment bank Goldman Sachs. He was the main driver of a sweeping tax overhaul passed by Congress in December and signed into law by Trump.

"It has been an honour to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform," Cohn said in a statement issued by the White House.

In a statement, Trump gave Cohn credit for his role in pushing the tax package through Congress and "unleashing the American economy once again".

"He is a rare talent, and I thank him for his dedicated service to the American people," he said.

Australian Associated Press